Higher tax band will 'dampen' the economy

The introduction of the new higher income tax rate will damage the economy, the TaxPayers’ Alliance has claimed.

A report from the group has argued that the upper tax threshold, set to increase to 50 per cent next year, will deter entrepreneurs from investing in start-up businesses.

Matthew Sinclair, research director at the TaxPayers’ Alliance, said: “The new top rate that the government is proposing won’t just fail to raise significant revenue; by putting off potential entrepreneurs, it will reduce employment and make it more likely that ordinary Britons can’t find work.

“The 50p rate of income tax was a political stunt that isn’t worth the price of higher unemployment, so it should be abandoned.”